The Financial Supervisory Commission (FSC) and the Ministry of Economic Affairs will work together to develop a system to monitor Taobao and to regulate transactions made through the site, to ensure Taiwanese users' rights are protected.

Kuomingang legislator Lee Guei-min said that online shopping and other electronic business will create large flows of e-currency.

Customers in Taiwan account for a growing percentage of Taobao transactions, Lee said, which will require the government to set clear regulations protecting consumers' rights.

The legislator said that although the central government is in charge of regulating currency flow in and out of the country, there are no rules on the books concerning e-currency. This must be changed, he said.

The central bank governor conceded that there are currently no specific regulations regarding e-currency, and will consider setting new laws with the FSC.

Owned by China's largest e-commerce firm, Alibaba Group, Taobao is similar to eBay and Amazon.com, bringing together buyers and sellers through auctions and fixed-price sales.

It is the largest e-commerce site in the mainland, with market share estimated to be 70 per cent. The site processes 4.5 times more transactions than Amazon, according to one local report.